Reverse Mortgages Can Save Seniors More Money

Many seniors who want to remain in their homes for as long as possible are finding out more about reverse mortgages.

(NAPSI)-Understanding the basics of a reverse mortgage could save
you some
money.

For example, some banks offer FHA-insured reverse mortgages with
lower fees.
With the reduced cost, senior homeowners may have access to more
tax-free
loan proceeds to help secure financial independence.

"This is great news for people who are retired and want to increase
their monthly income. Reverse mortgage loans can help homeowners age
62 or
over to improve their monthly cash flow and have real peace of mind,"
said Tim McDonald, head of Wells Fargo's Senior Products Group.

Reverse mortgage loan proceeds are paid to the senior homeowner in a
lump
sum, for a fixed-rate loan or a lump sum, monthly payment, a line of
credit
or a combination of the three for a variable rate loan.

Additionally, there are no credit, employment or income
qualifications for
the reverse mortgage programs. Homeowners must be at least 62 and own
their house
free and clear or able to pay it off with proceeds from the reverse
mortgage.

Many seniors use the loan funds to supplement retirement income,
meet
unexpected medical expenses, or make much-needed improvements to their
home.

"Social Security replaces only a fraction of preretirement
earnings,
so a reverse mortgage is a popular choice for retirees looking to
secure
financial independence," McDonald said.

McDonald added that with the recent reduction in Wells Fargo's
origination
and servicing fees, on average, customers can have up to $9,000 in
additional
reverse mortgage loan funds made available to them.

Reverse mortgages can be key to ensuring that seniors have the
financial
ability to age in place. Studies show that 85 percent of older
Americans want
to stay in their homes for as long as they can. Even modest homes have
the
potential to generate more than $600 in monthly proceeds from a
variable-rate
reverse mortgage--as long as the senior lives in the home as his or
her
primary home, keeps the taxes and insurance paid and maintains the
house to
FHA standards.

That amount of money can make a big difference in the lifestyle of
someone
in retirement.

The HECM is the most popular reverse mortgage in America
today and is only available
through an FHA-approved lender. The program has insured more than
580,000
reverse mortgages since 1989.

Wells Fargo attributes the growth of reverse mortgage loans to
several
factors, including that seniors have greater awareness and
understanding of the
reverse mortgage loan product, and the aging U.S.
population--currently, more
than 34 million Americans are over the age of 65.

By 2050, it is projected that 86.7 million Americans will be 65 or
older.

The loan amount for a reverse mortgage is based on three factors:
age of
the youngest borrower, value of the home and current interest rates.

Numerous consumer safeguards are built into the program, including
mandatory HUD-approved counseling, payment guarantees, capped interest
rates
and advanced disclosures.

A consumer-friendly website with a reverse mortgage calculator has
been
created by Wells Fargo to help seniors learn about reverse mortgages,
download free educational materials, and calculate an estimate of how
much a
reverse mortgage could provide them in retirement. Visit www.wellsfargo.com/reverse.

Not all bank and mortgage companies originate reverse mortgages.
Wells
Fargo is the nation's leading retail originator of reverse mortgages.